Look, the Soup is Made, the Bread is Toasted, the Butter is Soft.
Equities start the day higher as the Bull market ROARS on. Tell you what, this thing is hotter than Sergio Dip and a fresh Taylor Swift track combined!! 2,488…up 11.1% YTD and a gazillion percent since someone at Lehman decided to lend $100mm to a postal worker in Cape Canaveral so he could buy 42 beachfront estates. You know what the craziest part of the past 10 months is? That it came with zero help out of Washington. You know where the 10yr yield was days after the election? 2.15. You know where it is now? 2.15. Tell them what they’ve won Jonny!! YESSSS….You’ve won a roundtrip ticket to “it doesn’t matter who won the election because the US is vibrant economy with a sound rule of law and endless innovation driven by some of the smartest people on the planet” land. You’ll enjoy an 11% gain on your stock holdings because you managed to tune out all the noise and focus on what matters: the economy and corporate earnings. Imagine if we actually got tax reform or healthcare reform or an infrastructure bill…..we’d have money coming out of the wazoo!! Ok, let’s serious it up for a second: The BAML fund manager survey came out this morning and it showed managers are underweight US equities by the most in 10 years. Cash levels are high, taking out protection is at a 14 month high (I mean who doesn’t love protection), and it appears the most crowded trade is now “long bitcoin” (I hate you all for ruining my lottery ticket). Look, these aren’t the kind of things you see at a bubble top (maybe bitcoin but we need another recap to tackle that) so I’m gonna need someone to show me where all the exuberance is because I can’t find it. The number of S&P stocks that made a new 52wk high is expanding again and you know the Fed is gonna go on pause in the wake of recent events. Look, the soup is made, the bread is toasted, the butter is soft, is there anyone here who doesn’t think this is a great set up for a rally into year end? All of a sudden I want bread for dinner too.
After the open there were so many things going on I’m not sure I have the space to address it all! First off there was some kind of big shindig in NY where people who are experts of a different version of the world told us that the future is scary, bitcoin might be a bubble, maybe you should own Gold, and stocks are really “pricey here”. I don’t know, are the people who crushed it in the 2000-2010 era the only ones we can turn to for thoughts about the future? Maybe they were visionaries back then and now we need to find a new group? AAPL held their big product update in that fancy spaceship they built and FINALLY introduced a watch I have to own. No longer will you need to take your clunky iPhone with you to use it, no no my friends now you’ll pay ATT or VZ $10 a month to make phones calls like Dick Tracy. Holy cow, I bet I just alienated everyone under the age of 35. Dick Tracy….Lord….does anyone even know who that is anymore? By the way, how often am I going to have to charge this thing? Every 20 minutes? Honey, I have no idea what time it is, I was playing League of Legends on my watch and it died (just brought it right back to alienate everyone OVER 35. Look how versatile I am). They also introduced a new iPhone that unlocks by using facial recognition so I guess Tim Cook spent a bunch of time in Braavos lately. Wait, isn’t this supposed to be a market recap? We spent most of the session following thru on yesterday’s gorgeous breakout and by lunch we sat on 2,493, up 0.2%. Winners GPS, RRC, PRGO, CTL, and LB. Losers ANTM, MCD, FE, ES, and PSA (all kinds of utils looked awful).
The rest of the day was spent bouncing around and a close at the highs….boom….2,496 up 0.34%. So look, we need to talk about follow thru because this is a bull market and once new highs are made you tend to see this happen (h/t Holty). We traded sideways from the middle of July all the way to early September, a long boring grind with no volume and stupid reasons to sell. The top of that range (2,480) will now be support and I’d expect we’d test it at least once or twice this week. If we hold that retest then giddyup because you know the floodgates of buying will open. +11.4% YTD….are you still overthinking it? Final Score: Dow +28bps, S&P500 +34bps, Nasdaq +34bps, Rus2k +61bps.
- Succinct Summation of the Day’s Events: New Apple toys including animated poo emojis (sigh….we used to land people on the moon…IN THE 60s), a couple conferences where people said the same thing (see next link), and Star Wars Ep 9 found a new director (I’m happy its Abrams again)
- Tweet of the Day: "Interest rates are too low and stocks are too high." -hedge fund managers at every single investment conference since 2010 - @awealthofcs
- The difference between Portfolio Managers and Portfolio Management:There is a personality difference between the people who are good at finding stocks and the people who call the shots on the timing and manage the whole portfolio. Security analysts dog down information and come up with an idea about what should be bought or sold, but they do not necessarily make good conductors for the whole orchestra. If they are woodwind players to start, they tend to hear the whole orchestra as woodwinds, and it takes another type to keep the woodwinds and brasses and strings in a line. There is a huge difference between a fund manager (the security analyst in Smith’s example), who comes up with individual investment ideas for a specific strategy and the conductor, who puts together the individual asset classes and strategies into a coherent portfolio strategy. It’s the difference between a portfolio manager and portfolio management.
- So what am I supposed to do in this new Nordstrom’s? Pop in, have a manhattan, get my hair cut and order a suit online?
- Could not be more true for me and my wife
- I know a PWM team this would make a great gift for!
- Dad of the year candidate
- Open this on a big monitor…stunning
- Ill take this kind of waterbed over the one’s from the 70s
- Breadth indicator foreshadowed the new highs: NYSE New Highs - New Lows quietly said “be open to a rally in stocks” by making a new high on Wednesday, September 6 (see chart below). The S&P 500 followed on Monday, September 11, 2017
- Dumpster diving for stocks can be a viable strategy: It’s often not good or bad that matter with investments, but better or worse. When dumpster diving for beaten-down shares, you must be able to understand how far divorced fundamentals have become from investor expectations.
We’ll end tonight with something I honestly can’t figure out. I don’t get how this happened at all and I have an MBA (maybe that’s the problem)
Have a good night